Infographic: Consumer behavior on digital channels in 2018

It’s hard to believe, but 2018 is rapidly coming to a close! With 2019 growing ever closer, many are making predictions for the year ahead with regards to digital transformation and customer experience. However, as it can be hard to make informed predictions on how people will behave in the future without taking the time to look at how they are behaving in the present, we’re going to begin our end-of-year wrap-up by looking at relevant statistics and trends.

Because the current state of digital customer service is one in which retail companies are not meeting customer expectations for digital customer care, we’re going to consider the following as separate questions:

  1. How are customers behaving on digital channels?
  2. How are companies acting on implementing digital initiatives in their organizations?

Customer facts: how did consumers behave on digital channels in 2018?

1. We’re drowning in data

One of the unintended side-effects of our increasingly digital society is that we are creating more data than ever before in human history. In the past two years alone, we have created more than 90% of the world’s data. Currently, we are creating data at a rate of 2.5 quintillion bytes of data per day.

Partly this is because of the explosion of the Internet of Things; by 2020, there will be 20 billion IoT “things” connected to the internet. Another major cause is the increasing penetration of mobile. More than half of Black Friday / Cyber Monday shopping is already done over mobile, as are more than half of searches.

And yet, with all that data at their fingertips, it’s estimated that businesses are using only 1% of customer data effectively.

2. Digital messaging continues to grow in popularity

Facebook Messenger has 1.3 billion users, and their monthly active users equate to 11% of the world’s population. Users are relying more on rich communication features, sending 5 billion emojis and 36 million GIFs per day.

3. eCommerce is continuing to grow at accelerating rates

Consumers’ comfort levels with eCommerce continue to grow. In 2017, a survey showed that half of US respondents had bought a product online after seeing it on social media. And in only two years, click-and-collect grocery shopping has risen 30% from 18% of online grocery sales in 2016 to just under half (48%) in 2018.

However, retailers still have a tough road ahead in terms of conquering the challenges that customers experience when shopping online:

  • Online cart were abandoned 79% of the time in 2017
  • The most common reason for cart abandonment was extra costs, such as shipping
  • The next most common reasons relate to the checkout experience itself: 37% abandoned carts because they did not want to create an account, and 28% felt the checkout process was too complicated

4. Consumers want personalization, but only if it’s accurate

Personalization drives increased revenue and engagement, but only if it’s done well. When done poorly, personalization attempts are seen as spam and negatively impact perception of a brand:

  • 43% of surveyed consumers are willing to give retailers their data for personalized promotions and sales
  • 39% responded they would also do so to get their problems solved faster, however
  • 32% of surveyed consumers said that irrelevant targeting is an “invasion of privacy”

5. Online buying habits vary by generation

With the oldest Millennials approaching their 40s, Generation Z is accounting for a growing share of online retail revenue. However, their buying patterns are very different than even Millennials, who live digitally but grew up analog. Millennials (26.16%) side with Generation X (32.28%) and the Baby Boomers (31.91%) in ranking the inability to see, touch, or try on products as their #1 frustration with online shopping. For Generation Z, however, their top frustration is not having immediate access to their purchased items.

However, Millennials do side with Generation Z when it comes to their preferred social network for finding products to purchase online; Boomers and Gen X most commonly purchase items seen on Facebook. For Millennials and Generation Z, the majority of their online shopping dollars are spent on products found on Instagram and Snapchat. How they make those purchases also shifts generationally: when it comes to payment methods, Generation Z and Millennials use mobile wallets twice as often as Generation X and Boomers.

Perhaps the most surprising difference between Generation Z and their older counterparts is attitudes toward product returns. When asked how many of their online purchases they expected to return, Generation Z expected to return 75%, Millennials expected to return 50%, and Gen X and Boomers less than 50%. Additionally, Generation Z is six times more likely to order multiple products with the express intention of making returns.

Consumer behavior summarized:

What about brands?

All of that accounts for the consumer side of things, but we’ll have to leave looking at brands for next time. We hope you appreciated this overview.

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About the Author: Anna Kreider